According to Coyle, Langley, Novack, and Gibson (2012), the characteristics of a standard logistical company include the quest to achieve maximum customer service, the quest to provide high quality products, a desire to operate using the lowest possible costs, and increased flexibility to adapt to constant market changes. Generally, these characteristics reveal that consumer product companies prefer to sell the “right products,” at the “right quantity,” and at the “right price.” These attributes also apply to the company in the case study because changes to its logistical operations are meant to achieve the above synergies.
For example, LeanCor strived to achieve speedy product availability and the best service levels through adjustments to its client’s logistical service network (LeanCor Supply Chain Group, 2013). The speedy product delivery is more common than the latter because many customers want their products to be availed to them quickly after purchase. To emphasize the importance of this characteristic, LeanCor was careful not to set up distribution points that were more than four hours away from the destination point of goods.
They knew that making such a mistake could lead to customer dissatisfaction because the company would not deliver goods on time and possibly negate the goal of adjusting its logistical network – to improve service delivery. Therefore, achieving maximum customer service is an important logistical characteristic of the consumer product company because customers do not wish to suffer the burden of poor quality customer service, based on the pursuit by the company to make its logistical operations more efficient. This is why LeanCor was proud to have achieved its logistics operational goals without compromising customer service standards (LeanCor Supply Chain Group, 2013).
Most product companies strive to strike a balance between two basic targets – quality of service and low cost. LeanCor did not deviate far from this principle because its changes to the logistical network aimed to strike a balance between the two targets – high quality service and low cost. In fact, it achieved these objectives by reducing the total logistical costs by $1.8 million and reduced the number of warehouses from 64 to 51 without affecting its client’s service standards (LeanCor Supply Chain Group, 2013).
This action exemplifies the principles of the resource-based view, which has informed different aspects of supply chain management. The theory argues that a firm’s resources and capabilities are its most important attributes (ZongWei, 2013). In this regard, it would be difficult for such firms to gain a competitive advantage over their rivals if they do not tap into their resource competencies. Financial resources could affect the logistical capability of LeanCor’s clients because an inability to finance its inbound, or outbound, logistical operations could affect the quality of services it offers to its customers (ZongWei, 2013). Since financial resources are important to the company’s operations, it has tried to minimize the cost of operations to improve its financial position and leave little room for wastages.
The lean management philosophy in logistics management emphasizes this philosophy because it leaves little room for wastages and encourages the safeguard of company resources for the efficient management of resources (Coyle et al., 2012). Its relationship with the resource-based view demonstrates the need to cut costs, as a significant aspect of operational performance. Comprehensively, based on the insights highlighted above, speedy delivery of products and excellent customer service are the standard logistics operational characteristics of the consumer product company highlighted in the case study.
References
Coyle, J., Langley, J., Novack, R., & Gibson, B. (2012). Supply Chain Management: A Logistics Perspective. London, UK: Cengage Learning.
LeanCor Supply Chain Group. (2013). Distribution Network Design. Web.
ZongWei, L. (2013). Technological Solutions for Modern Logistics and Supply Chain Management. New York, NY: IGI Global.